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Employment Contract Details: Employee Classification and Employment Contract Period

employment contractIf you've been following along, last week we started a conversation around critical items every employment contract should include. As a small business owner, you may not have ever required an employment contract as most smaller companies often employ21 family members or friends, but we've found that as your company grows and you start to consider candidates beyond your circle of friends, you may feel more confident in extending an offer with a written, legal contract in hand first. But what other HR practices should you be putting in place? If you're unsure where to start or how to get started, contact a lawyer in Raleigh, Eldreth Law Firm. They can help you with all of your employment contract needs and provide guidance on other employment best practices so that you can hire smarter moving forward.

With that in mind, today we’ll discuss 2 more critical items every employment contract should include: employee classification, employment contract period, and scheduling.

Your Employment Contract Should Include Employee Classification Details

Employee classification has less to do with your employee's roles and responsibilities and more to do with ensuring tax and insurance compliance on your end as the employer. This has become increasingly important as more companies have started operating in gray territory. For example, Uber and Lyft are currently fighting lawsuits regarding the alleged misclassification of their employees.

Therefore, while it may seem like a simple consideration, it's really important that you give this line item some thought because how you classify your employees within the employment contract will ultimately affect what rights and benefits (such as health insurance) that individual has. It also will impact how much you can reasonably request of a candidate during negotiations.

Before making this classification, make sure you fully understand the difference between an employee and a contractor, and how you should handle hiring decisions for each. Your RALEIGH SMALL BUSINESS LAWYER can also help you with proper classification to help you avoid any potential lawsuits in the future.

It Should Include a Contract Period and Scheduling

Beyond employee classification, your employment contract should also clearly state if an employee is full-time or part-time, as well as whether their employment is permanent or scheduled for a designated time period with a start and end date (including assignments).

While we recognize that you may have some positions that are hired on an as-needed basis (which may be great for contractors), it's important that serious job seekers who are looking for traditional job placement are aware of positions that may have a predefined expiration date.

Once you've established the employment contract period, it's also important to include how many hours (or any specific hours, days, months) the employee will be expected to work as part of their employment contract; as well as any known irregularities in scheduling.

For example, you know that your business typically is open during the week from 9 am to 6 pm. You expect your employees to work during those hours. However, every May and November, you hold a semi-annual sale and extend your business hours to include weeknights and weekends. You also expect your employees to work during those sales. As such, make sure that you specify these irregularities upfront.

Alternatively, if there is any flexibility within an employee's schedule or work environments (such as working from home or flex-hours), OR different rules surrounding compensation for any of these work schedules (such as a shift differential, holiday pay, or overtime hours), specify that as well. All of these details will better define the role prior to employment.

Stay tuned for more critical items that should be included in your employment contract as we continue this conversation in the coming weeks. And if you feel as though you could use some help drafting an employment contract for your small business, don't hesitate to call ELDRETH LAW FIRM | RALEIGH SMALL BUSINESS LAWYER.




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